When people think about making a Will, they often think only about deciding who should receive their house, money or other assets after they pass away.
However, a properly drafted Last Will and Testament can do considerably more.
Apart from distributing your assets, your Will can appoint the person who will administer your estate, provide alternative arrangements if a beneficiary passes away before you, establish trusts for young children and record other important wishes relating to your estate.
This article explains some of the matters that you may consider including in your Will.
Note: This article generally discusses Wills made by non-Muslims in Peninsular Malaysia. The Wills Act 1959 applies to Peninsular Malaysia and does not apply to persons professing the religion of Islam. Specific legal advice should be obtained before preparing or executing a Will.
Table of Contents
1. Appointment of Your Executor
One of the first things to consider is who should administer your estate after your death.
This person is known as your executor.
Your executor will generally be responsible for matters such as:
- locating and identifying your assets;
- applying for the Grant of Probate;
- settling liabilities and expenses of the estate;
- dealing with banks, government authorities and other institutions;
- transferring or selling assets where required; and
- distributing the estate to your beneficiaries according to your Will.
You may appoint one executor or more than one executor.
It is also sensible to appoint a substitute executor in case your first-choice executor passes away before you, becomes incapable of acting, or does not wish to act when the time comes.
The person you choose should therefore be someone whom you trust and who is reasonably capable of dealing with the responsibilities involved.
2. Your Property
You may include instructions as to how your property should be distributed.
For example, you may own:
- a residential property;
- a condominium;
- commercial property;
- vacant land;
- investment property; or
- an interest or share in a property.
You can specify who is to receive the property after your death.
Alternatively, depending on your circumstances, you may provide for the property to be sold and the sale proceeds distributed amongst your beneficiaries.
More complicated arrangements are also possible. For example, a Will may provide for a property to be held by a trustee for a period of time before it is eventually transferred to the ultimate beneficiaries.
Under the Wills Act 1959, a person may generally dispose by Will of property which he or she owns or is entitled to at the time of death, subject to the applicable law and the nature of the ownership concerned.
3. Money in Bank Accounts
Your Will may provide for money forming part of your estate to be distributed to particular beneficiaries.
This may include monies held in:
- savings accounts;
- current accounts;
- fixed deposits;
- foreign currency accounts; and
- other banking or investment accounts.
You do not necessarily need to allocate every individual bank account separately.
For example, depending on your estate planning intention, your Will may simply provide that the balance of your estate is to be divided amongst several beneficiaries in specified proportions.
This can be more practical where your bank accounts and investments are likely to change over time.
4. Shares, Investments and Business Interests
Your Will may also deal with investments such as:
- shares in listed companies;
- shares in private companies;
- unit trusts;
- investment accounts;
- bonds and securities; and
- other investment assets forming part of your estate.
If you own shares in a family company or business, additional consideration may be required.
For example, the company’s constitution, shareholders’ agreement or other contractual arrangements may affect how those shares can be transferred after your death.
Business owners should therefore consider their Will together with their overall business succession arrangements.
5. Vehicles and Personal Belongings
A Will is not limited to high-value property.
You may also make gifts of personal belongings such as:
- motor vehicles;
- jewellery;
- watches;
- artwork;
- furniture;
- collectibles;
- family heirlooms; and
- other personal possessions.
If a particular item has sentimental importance, identifying the intended recipient in your Will may help reduce uncertainty amongst family members later.
6. Specific Cash Gifts
You can leave a fixed sum of money to a particular person.
For example, your Will could provide for a specified amount to be given to a sibling, relative, friend or another beneficiary.
These are sometimes referred to as specific monetary legacies.
When making such gifts, consideration should also be given to what should happen if the intended beneficiary passes away before you.
7. Gifts to Charities or Organisations
You may also wish to leave part of your estate to a charitable organisation or another organisation that is important to you.
The gift could take the form of:
- a fixed sum of money;
- a percentage of your estate;
- a particular asset; or
- part of the remaining estate after other gifts have been distributed.
Where an organisation is being named as a beneficiary, it is helpful to identify the organisation correctly so that there is no uncertainty as to the intended recipient.
8. Your Residuary Estate
One of the most important clauses in a Will is the residuary clause.
Your residuary estate generally means the assets remaining after payment of your debts, expenses and any specific gifts provided for in the Will.
A residuary clause is important because it can also deal with assets which:
- were acquired after your Will was signed;
- were unintentionally omitted from the Will;
- were not specifically distributed elsewhere; or
- fall back into the estate because a particular gift cannot take effect.
For example, a person may leave:
- 50% of the residuary estate to one child; and
- 50% to another child.
Without an appropriate residuary clause, part of the estate could potentially be left undisposed of under the Will.
9. Substitute or Alternative Beneficiaries
A Will should ideally consider more than one possible scenario.
Suppose you leave your estate to your spouse but your spouse passes away before you.
What happens then?
Instead of leaving the position uncertain, your Will may provide for an alternative distribution.
For example:
If my spouse survives me:
My estate goes to my spouse.
If my spouse does not survive me:
My estate goes to my children in equal shares.
Further provisions may also be included to address what should happen if one of the children passes away before you.
Planning for these possibilities can help make the Will more resilient to changes in circumstances.
10. Trust Arrangements for Children
Parents may not necessarily want young children to receive a substantial inheritance immediately.
A Will can contain a testamentary trust, under which assets are held by trustees until certain conditions are satisfied.
For example, a Will may provide that a child’s inheritance is to be held by the trustee until the child reaches a specified age.
During the trust period, the trustee may be authorised to use money for matters such as the child’s:
- education;
- maintenance;
- medical expenses;
- accommodation; and
- general welfare.
Depending on the family’s circumstances, more sophisticated trust arrangements may also be considered.
For example, a parent may wish to allow income generated by an asset to be used for a spouse or children while preserving the underlying capital for the children at a later stage.
Such arrangements should be carefully drafted because the duties and powers of the trustee, the duration of the trust and the eventual distribution of the capital all need to be addressed.
11. Appointment of Guardians for Minor Children
Parents with young children should also consider who they would wish to care for their children if the need arises.
Accordingly, a Will may contain provisions dealing with the appointment of a guardian.
It is also sensible to consider a substitute guardian in case the first person appointed is unable or unwilling to act.
The appointment of a guardian and the management of the child’s inheritance are separate issues. The same person may sometimes act in both capacities, but this is not compulsory.
12. Who Should Manage Assets Held for Your Children?
Where your Will creates a trust, you will also need to determine who should act as trustee.
The trustee will generally manage the assets held under the trust until the beneficiaries become entitled to receive them.
Depending on the Will, the trustee’s duties may include:
- managing money and investments;
- maintaining a property;
- collecting rental income;
- paying expenses;
- using trust funds for the beneficiaries; and
- eventually transferring the assets to the beneficiaries.
It is therefore important to appoint someone who is capable of managing these responsibilities.
A substitute trustee may also be appointed.
13. What Happens If a Beneficiary Dies Before You?
This is another issue that should be considered when preparing a Will.
For each major gift, ask:
What happens if this beneficiary is no longer alive when I pass away?
Your Will can expressly provide an alternative.
For example, you may provide that if a child passes away before you but leaves children of his or her own, that child’s share is to pass to those children.
Clear substitute provisions can significantly reduce uncertainty in the administration of an estate.
14. Debts, Expenses and Liabilities
A Will commonly authorises the executor to settle the deceased person’s legitimate:
- debts;
- funeral expenses;
- testamentary expenses; and
- estate administration expenses
before distributing the remaining estate.
The existence of a Will does not cause debts to disappear.
The executor must generally administer the estate and deal with the deceased’s liabilities before distributing the net estate to the beneficiaries.
15. Funeral Wishes
Some people also wish to record their preferences concerning funeral or memorial arrangements.
Such wishes may be included, but there is an important practical consideration.
Funeral arrangements often need to be made very shortly after death, sometimes before the Will has even been located or read.
It may therefore be preferable to communicate important funeral wishes separately to close family members or your intended executor rather than relying solely on the Will.
16. Digital Assets
Modern estate planning increasingly involves digital assets.
These may include:
- online financial accounts;
- cryptocurrency;
- digital investment platforms;
- domain names;
- websites;
- monetised online accounts;
- cloud storage; and
- other digital property.
Whether a particular digital asset can be transferred under a Will will depend on the nature of the asset and the terms governing the relevant platform.
It may also be useful to maintain a separate and secure inventory identifying your important digital accounts.
For security reasons, passwords and other sensitive access credentials should generally not simply be written into the Will itself.
17. Assets Subject to Nominations or Other Arrangements
Not every asset should automatically be treated in the same way as an ordinary estate asset.
Certain assets may be affected by:
- statutory nominations;
- insurance nominations;
- trust arrangements;
- joint ownership;
- contractual provisions; or
- other arrangements made outside the Will.
For example, EPF has its own nomination framework. For non-Muslim EPF members, EPF states that the nominee is the beneficiary entitled to the nominated EPF savings.
Accordingly, when preparing or reviewing a Will, it is useful to review your nominations and other estate-planning arrangements at the same time.
A Will should not be prepared in isolation from the rest of your financial affairs.
Do I Need to List Every Single Asset in My Will?
Not necessarily.
There are generally two approaches.
You may identify particular assets specifically where you want a particular person to receive them.
Alternatively, broader clauses can be used so that certain categories of assets, or the entire residuary estate, pass to specified beneficiaries.
This can be particularly useful because your assets are likely to change throughout your lifetime.
You may sell one property, purchase another property, close bank accounts or acquire new investments after signing the Will.
A properly drafted Will should therefore consider not only the assets you own today, but also how your estate should be dealt with in the future.
Can I Change My Will Later?
Yes.
Your Will should be reviewed whenever there is a significant change in your personal or financial circumstances.
Examples include:
- marriage;
- birth of a child;
- death of a beneficiary;
- acquisition or disposal of substantial assets;
- changes in family circumstances;
- changes to your intended executor or guardian; or
- significant changes to your estate-planning intentions.
One particularly important point is marriage.
Under section 12 of the Wills Act 1959, marriage generally revokes an existing Will unless the Will falls within the statutory exception, including a Will expressly made in contemplation of that marriage.
Your Will should therefore not simply be signed and forgotten.
Making a Will Is About More Than Dividing Your Assets
A Will is ultimately a set of instructions for what should happen after your death.
A comprehensive Will may therefore address:
- who should administer your estate;
- who should inherit your assets;
- who should inherit if your first-choice beneficiary dies before you;
- who should care for your minor children;
- who should manage assets held for young beneficiaries;
- when beneficiaries should eventually receive those assets; and
- what should happen to everything else that you own.
The appropriate provisions will depend on your family circumstances, the type of assets you own and what you want to achieve.
For a straightforward estate, the Will may be relatively simple.
Where the estate involves minor children, multiple properties, business interests, foreign assets, blended families, life interests or trust arrangements, more detailed drafting may be required to ensure that the Will accurately reflects your intentions.
Disclaimer
This article is intended for general information only and does not constitute legal advice. The appropriate terms of a Will depend on the testator’s individual circumstances, assets, family arrangements and applicable law. Specific legal advice should be obtained before preparing or executing a Will.
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